By on April 20, 2010

Analysts will have a lot of uncomfortable questions tomorrow when Chrysler reports post-bankruptcy financial results, while Fiat unveils “la strategia grande” domani in Italy. They will finally unveil their long-awaited 5 year plan.

According to Reuters, “more questions than answers could still remain about Chief Executive Sergio Marchionne’s turnaround strategy.” The most uncomforting question will be: “Are you sure?”  

Or, in more elaborate form, “how can Fiat succeed where previous owners Daimler and Cerberus Capital Management walked away bruised by losses,” analysts wonder according to the Reuters story. They miss the cars Chrysler is supposed to sell. Consumer Reports called Chrysler’s lineup of cars “woefully uncompetitive.”

The Wall Street Journal likewise sees “reason for skepticism,” and benignly states that “Chrysler remains work in progress.”

Oliver Hazimeh, a partner at consulting firm PRTM, has a simple solution that assures immediate success for Chrysler: “They need at least one or two what I would consider ‘home runs’ — really nine out of 10 strong ‘buy’ recommendations by Consumer Reports. And they need to have two or three additional, also very strong, product offerings.”

See? It’s not that hard.

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14 Comments on “The Chrysler Patient: Prognosis Guarded...”

  • avatar

    Where can I sign up for a job at Mr. Hazimeh’s consulting firm? I think I could do quite well consulting Chrysler and other ‘woefully uncompetitive’ companies by spewing tired baseball…no, soccer metaphors.

  • avatar

    Gee… they simply need better products. Why didn’t I think of that?

    Either this company or GM needs to die. Sadly, it will probably be Chrysler.

  • avatar

    From the PRTM website:
    “PRTM is not your typical consulting firm. We are operational strategists, developing innovative solutions to operational issues. In many cases, we help companies realize breakthrough results that change the parameters of their industry.”

    Yet from an actual PARTNER at that consulting firm, we get the tired old homlie of:
    “They need at least one or two what I would consider home runs”.

  • avatar

    The key to volume success in the American market is a winning mid-sized sedan, something that Chrysler has not had since the 1973 Plymouth Satellite. They also need a sales winning compact sedan like the Reliant/Aries or even the Neon. Trouble is the compact won’t arrive until the year 2012 and the new mid-sized in 2013. The artist conceptions on the Internet of the refreshed Sebring due at the end of the year don’t look that hot. Plus will the new sedans really be so much better than the new Malibus, Fusions and Camrys that are due around 2012-13?

    • 0 avatar

      well, i can only partially agree… the mid-size customer wants a good-looking, well-roaring and impecably finished roller. but he wants as well the impression that he’s driving a car in the class above… see that grande punto with maserati looks? chrysler has dodge (and, oh! the srt commando) in the muscle segment – maybe it’s there that they should take some inspiration, in order to build cars that make people dream… and get them to the dealership.

  • avatar

    How can Fiat succeed where Daimler and Cerberus failed?

    1. Fiat has a profitable business (presumably) and is not sucking every dime it can get out of Chrysler in order to fund its european business.

    2. Fiat has some experience in the low and mid price segments and is not micromanaging Chrysler areas where it had not a clue what it was doing.

    3. Fiat’s management has not sent every talented designer, engineer and manager running for the exits.

    4. Fiat did not send a two-time loser executive with no automotive experience whose job it was to take a hollowed out shell of a company and make it look like a real car company long enough to strip and flip any assets worth keeping.

    The real question is whether there is enough left for Fiat to work with. Everything I hear is that the company is under the best management since before Daimler. Can they get new and appealing product out (remember that the pipeline was virtually dry) before they run out of money? This is what I am waiting to hear the answer to.

    • 0 avatar

      Well said JP.

      Let’s not forget they don’t have to completely redesign every car immediately. Some of the basic platforms aren’t bad, and with some tweaking to the chassis tuning and dynamics and interior/exterior refreshes, some of them are quite serviceable and will do ok as a holdover until they start merging platforms with Fiat.

      For example, if you objectively look at the 300/Charger platform and forget about the cheap interior, its actually not a bad car and it makes a good base to build on/improve. If the pictures on the various websites are anything to go by, complaints of cheap interiors in the 300/Charger should be a thing of the past once the revised cars launch.

    • 0 avatar

      +1, well said!

  • avatar

    The new Grand Cherokee is due out May 10. It will be an appealing car, but unfortunately in the fading SUV market. Still, it’s a Jeep, and will have good new features, particularly in the suspension.

  • avatar
    Geo. Levecque

    Is Jeep not being spun off any day soon?

  • avatar

    The problem with Chrysler as it is now is not that there are a few bad cars in the bunch. Ford has the Ranger as a woefully-aged vehicle, and the Focus which isn’t very good either. Chevy has the Colorado, Cobalt and Aveo. Toyota has the Yaris and (to a lesser extent) Corolla.

    Chrysler’s problem is that all of its cars are pretty universally terrible in their segments.

    I needn’t even discuss the Sebring and Avenger. Then we have the Caliber, which isn’t particularly fuel-efficient, and the Compass and Patriot twins which are both unconvincing as off-roaders and aren’t particularly great on-pavement either. The Jeep Liberty and Dodge Nitro are both bad, with the Liberty being worse than the Liberty design it replaces. The Challenger is really too heavy for the ponycar segment, and there aren’t any heavy-duty GTO-type muscle cars for it to compete with. Even then it’s heavy, and it’s base model V6 is horrifically underpowered for a “sports car.”

    The Journey isn’t particularly great in its segment, having been totally overshadowed by the Edge and GMC and Chevy crossovers. The Dakota is old, guzzles gas, and it’s big, heavy and ugly. Even the terrible Colorado beats it in sales. Meanwhile, its bigger brother RAM is better but it showed up to the party with exactly the wrong virtues for these times (recreation-oriented coil shocks when the market demands leafs for work duty.)

    Basically the entire current product portfolio is a total mess. And so Chrysler would have to change every product immediately to really sort things out. And that assumes that the changed products score a hit with American audiences. That also assumes that potentially damaging risks work (such as the plan to replace the Compatriots with the much smaller Panda).

    For a great deal of people Chrysler is already dead-no competitive products, a monetarily-bankrupt company, an exhausted design and development team, and lots of mixed connections with Daimler that Chrysler is still trying to sort out.

    I think a lot of people would like a stylish, high-quality Chrysler product, but till the product nightmare is really and truly sorted out the vast majority of customers are going to steer clear of Mopar. All of that makes a recovery difficult to impossible even under favorable conditions.

  • avatar
    buzz phillips

    I knew it was all over but the cryin for Chrysler and GM when they got the bail out money! Just a matter of (not very much) time! Poor, poor tax payers!

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